The online advertising market could
break through the $300 million threshold this
year, with key players saying savvy advertisers
are continuing to fuel increases of more than
50 per cent this year.

According
to the heads of ninemsn and f2, which have finalised
deals in the past week with the Yahoo!-owned Overture
for paid search listings, online advertising demand
is matching last year's growth.

The
Audit Bureau of Circulations says online revenues
increased from $140 million in 2002 to $236 million
last year. Online advertising covers classifieds,
display advertisements such as banners and sponsorships,
and search and directories.

The
figure of $300 million was "very likely",
said ninemsn's chief executive, Martin Hoffman,
who announced last week the company had dumped
LookSmart in favour of Overture for the delivery
of "paid search" advertisements across
ninemsn's online properties. "We're in the
middle of the advertising cycle and we're seeing
strong growth across the board."

Nick
Leeder, f2's chief operating officer, said classified
and paid search advertising was growing at about
60 per cent this year, with display ads up about
30 per cent. "[The market] will probably
make it to $300 million this year - if not in
2004, certainly within 18 months," he said.
"As a network we certainly know traffic goes
up 40 per cent per annum. Every year I think 'this
will be the year it will stop', and every year
I'm wrong. You're just getting more people with
broadband and we're making site services better."

Mr
Hoffman of ninemsn said paid search would be "the
big story over the next 12 to 18 months".

Overture's
managing director, Mel Bohse, said the paid search
market was worth an estimated $35 million. About
60 per cent of Overture's revenues came from blue-chip
companies and 40 per cent from small and medium-
sized enterprises. "For us, the growth will
definitely come from the SME market - because
it doesn't require creative, it's not at the high
end. Our entry point is very low. There's a minimum
of 10c to get into a placement."